Investor Presentation - May 2022 NASDAQ: CLFD - Clearfield, Inc. (CLFD)
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Investor Presentation
May 2022
NASDAQ: CLFD
Forward-looking statements contained herein and in any related presentation or in the related Earnings Release
are made pursuant to the safe harbor provisions of the Private Litigation Reform Act of 1995. Words such as “may,”
“will,” “expect,” “believe,” “anticipate,” “estimate,” “outlook,” or “continue” or comparable terminology are
intended to identify forward-looking statements. Such forward looking statements include, for example,
statements about the Company’s future revenue and operating performance, anticipated shipping on backlog and
future lead times, future availability of components and materials from the Company’s supply chain, the impact of
the Rural Digital Opportunity Fund (RDOF) or other government programs on the demand for the Company’s
products or timing of customer orders, the Company’s ability to add capacity to meet expected future demand, and
trends in and growth of the FTTx markets, market segments or customer purchases and other statements that are
not historical facts. These statements are based upon the Company's current expectations and judgments about
future developments in the Company's business. Certain important factors could have a material impact on the
Important Cautions Company's performance, including, without limitation: the COVID-19 pandemic has significantly impacted
worldwide economic conditions and could have a material adverse effect on our business, financial condition and
operating results; we rely on single-source suppliers, which could cause delays, increases in costs or prevent us
from completing customer orders; fluctuations in product and labor costs which may not be able to be passed on
Regarding Forward- to customers that could decrease margins; we depend on the availability of sufficient supply of certain materials,
such as fiber optic cable and resins for plastics, and global disruptions in the supply chain for these materials could
prevent us from meeting customer demand for our products; we rely on our manufacturing operations to produce
product to ship to customers and manufacturing constraints and disruptions could result in decreased future
Looking Statements revenue; a significant percentage of our sales in the last three fiscal years have been made to a small number of
customers; further consolidation among our customers may result in the loss of some customers and may reduce
sales during the pendency of business combinations and related integration activities; we may be subject to risks
associated with acquisitions; product defects or the failure of our products to meet specifications could cause us to
lose customers and sales or to incur unexpected expenses; we are dependent on key personnel; cyber-security
incidents on our information technology systems, including ransomware, data breaches or computer viruses, could
disrupt our business operations, damage our reputation, and potentially lead to litigation; our business is
dependent on interdependent management information systems; to compete effectively, we must continually
improve existing products and introduce new products that achieve market acceptance; changes in government
funding programs may cause our customers and prospective customers to delay, reduce, or accelerate purchases,
leading to unpredictable and irregular purchase cycles; intense competition in our industry may result in price
reductions, lower gross profits and loss of market share; our success depends upon adequate protection of our
patent and intellectual property rights; if the telecommunications market does not expand as we expect, our
business may not grow as fast as we expect; we face risks associated with expanding our sales outside of the
United States; and other factors set forth in Part I, Item IA. Risk Factors of Clearfield's Annual Report on Form 10-K
for the year ended September 30, 2021 as well as other filings with the Securities and Exchange Commission. The
Company undertakes no obligation to update these statements to reflect actual events unless required by law.
© Copyright 2022 Clearfield, Inc. All Rights Reserved.
NASDAQ:CLFD 2
OUR MISSION:
Enabling the
Lifestyle Better
Broadband
Provides
NASDAQ:CLFD 3
What We Do
Clearfield provides fiber
protection, fiber management and
fiber delivery solutions that enable
rapid and cost-effective fiber-fed
deployment throughout the
broadband service provider space.
NASDAQ:CLFD 4
Company Overview
Founded in No. of Employees Total Revenue (TTM) Gross Margin (TTM)
(As of Sept. 30, 2021) (As of Mar. 31, 2022) (As of Mar. 31, 2022)
2008 250 $188.6M 44.0%
Headquartered in Customer Base Net Margin (TTM) Profitable Fiscal Years
(As of Mar. 31, 2022)
Minneapolis 700+ 17.6% 14 of 14
NASDAQ:CLFD 5
Target Markets
NASDAQ:CLFD 6
Our Scalable, Uniform & Cost-Effective Platform
Fiber Management Fiber Protection & Delivery
FieldSmart Passive Architecture FieldSmart Active Architecture Clearview FieldShield & YOURx
Passive panels, frames, cabinets, Powered cabinets for the outside Patented cassettes that connect Fiber pathway and protection
wallboxes, and pedestals for the plant and access network multiple fiber optic cables systemconsisting of microducts,
inside plant, outside plant and cables, drop cables, connectors
access network and terminals
NASDAQ:CLFD 7
Our Value Proposition –
Removing Obstacles
1. Craft-friendly – requires less
skilled labor and overall labor
time
2. Designed to reduce permitting
and right-of-way
3. Faster turn-up time for quicker
revenue per subscriber
NASDAQ:CLFD 8
FTTH
Connecting Twice
as Many Homes
✓ One crew
✓ One truck
✓ One day
NASDAQ:CLFD 9
Simplified FTTH Network
HEAD END
CENTRAL OFFICE
DATA CENTER
SUBSTATION
NASDAQ:CLFD 10Head End / Central Office / Data Center
NASDAQ:CLFD 11Fiber-to-the-Home (FTTH)
NASDAQ:CLFD 12Fiber-To-The-Premises
• Microduct
• Aerial
• Buried
• Pushable Fiber
• SC, LC and MPO
• Each FieldShield drop solution has
the same pre-terminated and
tested connector of the highest
quality. The technician has only to
snap on an inner and outer
housing - completing the
connection in minutes.
NASDAQ:CLFD 13Estimated Broadband Infrastructure Subsidies with Enacted Legislation
Legislation
Supporting
Broadband
Source: US Congress, Benton, JD Supra, Jefferies Research, & Clearfield Company Estimates NASDAQ:CLFD 14Committed Fiber Homes Passed
More New
Fiber Is
Expected In
The Next Five-
Year Period
Than All Years
To Date
Source: Dell’Oro Group
NASDAQ:CLFD 15Wireless
What “G” Is it?
Untangling Wireless
Applications
NASDAQ:CLFD 16It’s Not Going to Replace FTTH/B
(5G-FR1) (5G-FR2)
NASDAQ:CLFD 1717Preparing for 5G — It’s Really Not About the Phone
10,000
Wireless Subscriptions by Generation
9,000
8,000
7,000
6,000
5G
5,000 4G
3G
4,000
2G
3,000
2,000
1,000
0
2016 2017 2018 2019 2020 2021 2022 2023
Sources: Dell’Oro, Morgan Stanley Research Estimates. Strategy Analytics Service Provider Strategies, 2018
NASDAQ:CLFD 18Preparing for 5G — Rapid
Turn-Up, But Still in Infancy
Cumulative 5G Cycle Spend
• Market believed to have 20+ year $250B
sustainable opportunity $200B
• Unique point of entry for Clearfield, $150B
with next three years pivotal to gain
5G foothold $100B
• The elephant’s trunk coincides with $50B
Clearfield’s Now of Age Plan $0B
2019 2022 2025 2028 2031 2034 2037 2040
Sources: Dell’Oro, Morgan Stanley Research Estimates. Strategy Analytics Service Provider Strategies, 2018
NASDAQ:CLFD 19Densification
60 Times More
Antennas
TODAY’S 4G NETWORK FUTURE 5G NETWORK
This sketch (which does not depict an This sketch, showing one square mile,
actual city) shows the range of a single provides one estimate of how many 5G
4G macro cell at the center of the cells would be needed: 60, each
circle. Such a small cell, served by fiber, covering a 750-foot diameter area.
can potentially serve 10 square miles. These small cells could require about
The white square shows one square eight miles of fiber.
mile.
Source: FBA Technology Committee The sketch is conceptual. Actual deployments would be customized for local conditions and demand, and might need additional or fewer 5G cells.
http://apex/_layouts/15/WopiFrame.aspx?sourcedoc=/General%20Documents/FBA_5G_WhitePaper_V7.pdf&action=default NASDAQ:CLFD 195G Small Cell Site with Fiber
Small Cells Forum – Operator Survey
Key factors that will accelerate or hold back enterprise
small cell deployment before 2023
NASDAQ:CLFD 21Financial
Update
NASDAQ:CLFD 22FINANCIAL PERFORMANCE
Quarterly Revenue
$60.0
$50.0
$45.2
$51.1
$53.5
80%
Q2 2022 Growth Rate
$40.0 $38.7
$29.7
$30.0 $27.3 $27.1
$20.0
$10.0 $53.5M
$-
Q2 2022 Revenue
Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22
Revenue in Millions
NASDAQ:CLFD 23Q2 FY22 Net Sales Q2 FY22 Net Sales Composition
Comparison by Market Ended 3/31/221
Quarterly Net Sales TTM Net Sales International
(Canada, Mexico, and
Legacy
Caribbean Markets) (Legacy contract
manufacturing and
$133.2
misc. sales)
$39.9
FQ2 21 3% 1%
FQ2 22 MSO
FQ2 21 (Cable TV)
FQ2 22
14%
$75.8
National
$20.6 7%
Carrier
(Tier 1 Wireline and all
Wireless Markets) 75%
Community Broadband Community Broadband
Community Broadband
(Tier 2 & 3, utilities, municipalities,
and alternative carriers)
All dollar figures in millions
1) Based on net sales of $188.6 million and Point of Sales (POS) reporting from distributors NASDAQ:CLFD
NASDAQ:CLFD 24
who resell our product line into these markets.Q2 FY22 Net Sales Q2 FY22 Net Sales Composition
Comparison by Market Ended 3/31/221
Quarterly Net Sales
International Legacy
$7.4 (Canada, Mexico, and
FQ2 21 FQ2 22
Caribbean Markets) (Legacy contract
manufacturing and
misc. sales)
$4.0 $4.1 3% 1%
$2.3
MSO
$2.0
$1.5 (Cable TV)
$0.8 14%
$0.7
National Carrier MSO International Legacy
National
7%
TTM Net Sales
Carrier
(Tier 1 Wireline and all
$27.9
Wireless Markets) 75%
FQ2 21 FQ2 22
$14.5 $14.3
$12.1
$9.9
$5.0 $2.9 $3.0
Community Broadband
(Tier 2 & 3, utilities, municipalities,
National Carrier MSO International Legacy
and alternative carriers)
All dollar figures in millions
1) Based on net sales of $188.6 million and Point of Sales (POS) reporting from distributors NASDAQ:CLFD
NASDAQ:CLFD 25
who resell our product line into these markets.FINANCIAL PERFORMANCE
Annual Revenue
$160.0
$140.0
$140.8
60%
50% 51%
$120.0
40%
FY 2021 Growth Rate
$100.0 $93.1
$85.0 30%
$75.3 $73.9 $77.7
$80.0
20%
$60.0
$140.8M
10%
$40.0
$20.0 0%
$- -10%
FY 2021 Revenue
FY16 FY17 FY18 FY19 FY20 FY21
Revenue in Millions Change (%)
NASDAQ:CLFD 26FINANCIAL PERFORMANCE
Annual Gross Profit
$90.0 45%
$82.9
$80.0 44%
$70.0 43%
$61.2 42%
61%
$60.0
41%
$50.0
40%
$40.0 $37.9
$32.9 $32.7 39%
$30.3 $31.0 Gross Profit increase YOY
$30.0
38%
$20.0 37%
$10.0 36%
$- 35%
FY16 FY17 FY18 FY19 FY20 FY21 TTM
Gross Profit ($) Gross Profit (%)
NASDAQ:CLFD 27FINANCIAL PERFORMANCE
Annual Operating Expense
$45.0 35%
$40.9
$40.0
$35.9 30%
$35.0
$29.5 25%
$30.0 $27.5
$25.0 $25.9
$25.0 20%
$22.1
$20.0 15%
$15.0
10%
$10.0
5%
$5.0
$- 0%
FY16 FY17 FY18 FY19 FY20 FY21 TTM
Expenses in $Millions OP as a % of Net Sales
NASDAQ:CLFD 28FINANCIAL PERFORMANCE
Annual Net Income
$20.3M
$35.0 $33.1 20.00%
18.00%
$30.0
16.00%
$25.0 14.00%
FY 21 Net Income
$20.3
12.00%
$20.0
10.00%
$15.0
14.4%
8.00%
$10.0 6.00%
$8.0 $7.3
4.00%
$5.0 $3.8 $4.3 $4.6 FY 2021 Percent of Net
2.00%
Sales
$- 0.00%
FY16 FY17 FY18 FY19 FY20 FY21 TTM
Net Income $ Net Margin (%)
NASDAQ:CLFD 29Financial Outlook
$204M-
Annual Net Sales $218M
($ in millions)
$140.8M
$93.1M
$85.0M
$77.7M
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
FY 2022 guidance issued and effective as of April , 2022; growth rate is based on midpoint of net sales guidance range
NASDAQ:CLFD
NASDAQ:CLFD 30Clearfield “Now of Age” Plan
Accelerating our Amplifying Bold and Augmenting Capacity
Operating Cadence Disruptive Growth for Ongoing Growth
• Active investment in systems and • Leveraging Community Broadband • Investing in products,
processes to enable our agile work for One-Fiber Backhaul manufacturing and supply chain to
environment increase competitiveness and
• Removing obstacles for the
• Speed of delivery in every part of reduce costs
integration of wireline and wireless
our organization is paramount to
networks • Building upon Domestic and Global
our success
partnerships for faster product
• Bringing fiber management
innovation and cost reduction
expertise to 5G, NG-PON, and edge
programs
computing
NASDAQ:CLFD 31Overview on Nestor Nestor Products
• Nestor Cables was founded by cable technology professionals to
preserve the Finnish tradition of producing high-quality fiber optic
cables Fiber optic cables Microducts
and bundles
• Nestor is one of the leading developers and manufacturers of fiber
optic cable solutions in Northern Europe
• Nestor products are developed and tested to meet the highest
quality standards
Connectivity
• Reliable and flexible deliveries, quick reaction times, efficiency products for fiber
optic networks
NASDAQ:CLFD 32Nestor at a Glance
• Founded in 2007 in Oulu, Finland
• More than 100 employees
• Customers in 50+ countries
• Two production facilities
• FY 2021 revenue of EUR €31.7 million
(approximately $33 million) under Finnish
Accounting Standards.
• Nestor will have enhanced capabilities to
continue to meet its Finnish and European
customers
NASDAQ:CLFD 33Strategic Rationale
• Allows Clearfield to vertically integrate the
supply of FieldShield fiber optic cables to
meet future customer demand
• Enables Clearfield to leverage Nestor’s
deep technical expertise to extend overall
supply of FieldShield fiber into the North
American market
• Expected to reduce the cost and
complexity of freight by establishing
Mexico-based production of fiber cable
(est. early 2023)
• Exciting opportunity to bring Clearfield’s
cassette-based fiber management
solutions to European market
NASDAQ:CLFD 34Accelerating our
Operating Cadence
• Active investment in
systems and processes
to enable our agile
work environment
• Speed of delivery in
every part of our
organization is
paramount to our
success
NASDAQ:CLFD 35
NASDAQ:CLFD 35Amplifying Bold and
Disruptive Growth
• Leveraging Community
Broadband for One-
Fiber Backhaul
• Removing obstacles for
the integration of
wireline and wireless
networks
• Bringing fiber
management expertise
to 5G, NG-PON, and
edge computing
NASDAQ:CLFD 36
NASDAQ:CLFD 36Augmenting Capacity for
Ongoing Growth
• Investing in products,
manufacturing and
supply chain to increase
competitiveness and
reduce costs
• Building upon Domestic
and Global partnerships
for faster product
innovation and cost
reduction programs
NASDAQ:CLFD 37
NASDAQ:CLFD 37Contact Us
COMPANY CONTACT:
Cheri Beranek
President & CEO
Clearfield, Inc.
IR@clfd.net
INVESTOR RELATIONS:
Matt Glover or Sophie Pearson
Gateway Investor Relations
(949) 574-3860
CLFD@gatewayir.com
NASDAQ:CLFD 38Appendix
NASDAQ:CLFD 39Executive Management Team
Cheri Beranek Daniel Herzog Johnny Hill Kevin Morgan Allen Griser
President & Chief Executive Officer Chief Financial Officer Chief Operating Officer Chief Marketing Officer Chief Commercial Officer
• Co-founded Clearfield in 2008 • CFO of Clearfield since 2011 • Co-founded Clearfield in2008 • CMO of Clearfield since 2016 • Joined Clearfield in June 2019
• Previously President of APA Cables & • Previously Chief Financial Officer of • Previously VP of engineering and • Previously held senior marketing • 30+ years of experience in the
Networks (Clearfield’s predecessor Americable (which was acquired by product management positions at ADTRAN, Inc. and communications industry with
organization) Clearfield’s predecessor BellSouth (now part of AT&T) extensive experience in sales,
organization, APA Cables and • Over 25 years of strategic and marketing, quality, and operations
• Over 30 years of experience in Networks) hands-on experience in the • Held leadership positions with
executive roles at high-growth tech telecommunications networking the Fiber Broadband Association
companies, including Americable, • Held financial leadership roles in industry (a.k.a, Fiber-to-the-Home (FTTH)
TransitionNetworks, and Digi both public and private companies, Council Americas), including as a
International including Schwing America and regular Board Member since
Computer Designed Systems 2011 and Chairman of the Board
in 2015, 2019 and 2022
NASDAQ:CLFD 40You can also read
